Carbon Dioxide Removal Purchase Program.

Senator Caballero, joined by Senator McNerney and Assembly Member Davies, advances a new Carbon Dioxide Removal Purchase Program that would be administered by the State Air Resources Board to competitively fund in-state carbon dioxide removal projects. The bill’s findings frame climate change as a threat and contend that aggressive removal of atmospheric carbon is essential to meet state targets, while the program itself is designed to deploy eligible projects within California and provide community benefits, verification, and long-term storage assurances. The program would pool up to fifty million dollars for eligible removals from 2026 through 2035, with up to ten percent reserved for administrative costs and annual progress reporting, contingent on a legislative appropriation.

Key mechanisms require the ARB to establish a competitive grant process for eligible carbon dioxide removal projects, with a defined set of categories (including direct air capture, biomass removal and storage, enhanced mineralization, and marine approaches) and caps of up to twenty-five million dollars per category and twelve-and-a-half million dollars per sponsor. Projects must be physically located in California, demonstrate additionality, secure third-party purchases equal to the grant amount, and permanently retire the contracted removals from future credit issuance. Independent third-party verification is required, and a minimum storage duration of 100 years is specified. The program also mandates community benefits mechanisms, prohibits use for enhanced oil recovery, and restricts most biomass feedstocks unless used under the biomass carbon removal and storage framework. transaction design includes upfront payments tied to verification and a minimum contract term, with the possibility of adjusting purchases if a category is not feasible by the deadline.

Implementation involves adopting guidelines by early 2028, coordinating with multiple state agencies to ensure alignment with climate targets, and conducting and publishing annual surveys and reports through 2035, including cost-per-ton data for funded projects. Guideline development is noted as not applying Gov. Code procedural requirements, though two public workshops are required before funding and ongoing reporting and oversight are stipulated. The funding’s availability hinges on appropriation, with encumbrance and liquidation deadlines set for 2035, and the framework is designed to be consistent with California’s broader carbon removal program landscape, including existing carbon capture and removal authorities and standards.